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Happiness: The Next Key Performance Indicator

Sept. 9, 2013
Happy people live longer, are more productive, earn more and are better citizens, according to the second "World Happiness Report."

Most industrialized nations track their gross domestic product, exports and unemployment rates, among other key economic and social metrics that help quantify their standing in the world.

A new report calls on policymakers to include happiness in the mix.

Authored by leading experts in economics, psychology, survey analysis and national statistics, the second "World Happiness Report" describes how measurements of wellbeing can be used to assess the progress of nations.

Published by the United Nations Sustainable Development Solutions Network, the report "further strengthens the case that wellbeing is a critical component of economic and social development," according to the report's editors.

"There is now a rising worldwide demand that policy be more closely aligned with what really matters to people as they themselves characterize their wellbeing," said Jeffery Sachs, director of the Earth Institute at Columbia University, director of the Sustainable Development Solutions Network, and special advisor to the UN secretary general.

"More and more, world leaders are talking about the importance of well-being as a guide for their nations and the world. The World Happiness Report 2013 offers rich evidence that the systematic measurement and analysis of happiness can teach us a lot about ways to improve the world's wellbeing and sustainable development."

The first World Happiness Report, released in 2012 ahead of a high-level UN meeting on happiness and wellbeing, drew international attention as a landmark first survey of the state of global happiness.

The second edition goes further, delving in more detail into the analysis of global happiness data, examining trends over time and breaking down each country's score into its component parts, so that citizens and policymakers can understand their country's ranking.

It also draws connections to other major initiatives to measure wellbeing and provides guidance for policymakers on how to effectively incorporate wellbeing into decision-making.

Happy Danes

The 2013 report identifies the countries with the highest levels of happiness in the 2010-2012 surveys. Denmark ranked first, followed by Norway, Switzerland, the Netherlands and Sweden.

On a scale running from 0 to 10, people in more than 150 countries revealed a population-weighted average score of 5.1.

Six key variables explain three-quarters of the variation in annual national average scores over time and among countries: real GDP per capita; healthy life expectancy; having someone to count on; perceived freedom to make life choices; freedom from corruption; and generosity.

The report also shows significant changes in happiness in countries over time, with some countries rising and others falling over the past five years.

There is some evidence of global convergence of happiness levels, with happiness gains more common in Sub-Saharan Africa and Latin America, and losses more common among the industrial countries.

For the 130 countries with available data, happiness (as measured by people's own evaluations of their lives) significantly improved in 60 countries and worsened in 41.

What Makes People Happy?

For policymakers, the key issue is what affects happiness.

Some studies indicate that mental health is the single most important determinant of whether a person is happy or not. Yet even in rich countries, less than one-third of mentally ill people are receiving treatment, according to the report.

The happiness of the world would greatly increase, the report's authors conclude, if more people had access to good, cost-effective treatments for depression, anxiety disorders and psychosis.

The report also demonstrates the major beneficial side effects of happiness.

Happy people live longer, are more productive, earn more and are better citizens, according to the report.  

Consequently, the report suggests that nations should cultivate happiness – both for its own sake and for its side effects.

John Helliwell a professor at the University of British Columbia and co-director at the Canadian Institute for Advanced Research, will present key findings from the report in his keynote address at the institute's Symposium on Building Better Lives and Communities on Sept. 19 in Toronto. 

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